Sometimes I wonder if my investment strategy is worth the headache. I have a niche market where I clear about $900 a month profit on a house that costs about 100k. About an 11% return. I only have 2 properties since I’ve been buying the houses cash. I get using leverage to buy more but I also like not having a mortgage. Anyone who only buys cash also?

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Leverage has been my friend and I've used it in several ways. What i was able to do in 2021, after paying off my own house, was to refi at a 2.69% rate and 'loan' the money to pay off my rentals (which were mortgaged at a higher interest rate). Now, my rentals 'repay' the loan monthly, which, in turns pays my mortgage. Leverage!

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Yes, I am hoping that I can accelerate purchases as I get older. I’m not even 30 though, so I have time.

For me, it’s better to be a little more risk averse and be able to cash flow it.

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So I own a property in Hoboken, NJ, my wife owns one in Morristown, NJ, we own a townhouse in Frisco, TX and just bought our house in McKinney, TX… but they were all leveraged, simply because we lived in them, didn’t need the money for a down payment and became accidental landlords…

I have clients that have substantial real estate portfolios… all of them leveraged at the beginning, because it’s the easiest and fastest way to build a portfolio… your not chasing the cash flow, your chasing the growth…

If you can find a property that has a CapRate over 6%, that’s a win… it looks like you’ve found a goldmine of a market, and if there’s room for price appreciation north of 5% annually, I would leverage to the tilt if I could…

But this is not financial advice, just an observation…

For us it’s been alright because of the cost when she bought versus the explosion of the market over the last 10 years… she bought a condo on the green for ~$600K and rent it for ~$4.5K w/ a 24 month minimum… it’s probably worth ~$1M now… we’re around a 4% CapRate, but I see us offloading it when interest rates drop and prices rise…

I think we’re going to do the same thing with my condo in Hoboken… it’s just too much to manage…

Everything is in context. If $900 is irrelevant to you, then dump it, basically, and convert to something low maintenance. Is it worth your trouble?

I would also ask yourself if you're willing to hold it long term-- like forever-- because my view is that if you aren't holding a REALLY long time you might as well just invest it elsewhere.

I own seven houses, and the overall cap rate is likely between 8% and 9%. New deals don’t make sense with a cap rate of 2% or 3% in the best-case scenario, even with leverage. Cash deals are even worse. I’ve done the math, but it’s difficult to find deals that are financially viable right now.

At the moment deals are hard to come by but they’re out there. I work with investors daily and assist with obtaining capital. Since the rate cut I’m seeing the ability to acquire more access which helps where it relates to obtaining deals. Have you considered section 8? As an investor myself, yes it’s nice not having a mortgage but it also pays to have your equity work for you

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